Repository navigation
F. Coin Economy
This section explains how DMD is used and distributed within the network’s fixed maximum supply. It covers the genesis allocation, protocol pots, epoch rewards and governance funding, migration from DMDv3, and the redistribution rules for unclaimed allocations and abandoned validator stakes.
On this page
- DMD Coin and Its Uses
- Fixed Supply and Genesis Allocation
- Protocol Pots and Fund Flows
- Epoch Rewards and Governance Funding
- Migration and Unclaimed Allocations
- Abandoned Validator Stakes
DMD is the native coin of the DMD Diamond blockchain. It is used to transfer value, pay network fees, support validator participation, and participate in on-chain governance through the network's staking and voting mechanisms.
- Payments and transfers. Users can hold and transfer DMD using compatible wallets and applications.
- Network fees. DMD pays for transactions, smart contract deployment, and contract execution. Transaction fees flow into the Reinsert Pot to support future epoch rewards.
- Staking and network security. Pool owners commit DMD to validator pools, and coin holders can delegate to those pools. Eligible pools are selected using stake, Bonus Score, and randomness. Pools that meet the reward conditions receive epoch rewards, allocated among owners, delegators, and any configured node operator under the reward rules.
- Governance. Registered validator pool owners vote with weight that includes their own stake and delegated DMD. Delegators participate indirectly through their choice of pool; holding DMD alone does not confer a direct DAO vote.
Staking rewards depend on pool selection, availability, and the applicable reward conditions. The participant roles and reward allocation rules are described in Network Participants.
DMD Diamond v4 has a fixed maximum supply of 4,380,000 DMD. The supply was created at genesis and allocated for migration and protocol-controlled distribution. Epoch rewards redistribute DMD within this supply rather than minting additional coins beyond the limit.
The genesis allocation distinguishes two purposes:
- Migration allocations. The Claiming Pot was established for eligible balances recorded in the DMDv3 snapshot. The initial allocation used a 1:1 basis; the amount available to claim is subject to the claiming contract's rules and dilution process.
- Reward funding. The Delta Pot represents the difference between the DMDv3 snapshot issuance and the maximum supply of 4,380,000 DMD. It funds epoch rewards alongside the Reinsert Pot.
Creating the supply at genesis does not mean that every coin was immediately available for use. Coins held in protocol pots are released or redistributed under the relevant contract rules. The fixed maximum supply, balances held in those pots, and coins in circulation describe different aspects of the economy.
Earlier DMD versions used block-based issuance schedules. DMD v4 instead funds rewards through epoch allocations from the Delta Pot and Reinsert Pot. Historical per-block rewards and annual issuance estimates should therefore not be read as current v4 reward parameters. The calculation is described in Validator Reward.
The genesis configuration also established the initial network state and consensus configuration. Network initialization and subsequent validator-set transitions are described in Block Validation.
Four protocol pots organize the allocation and redistribution of DMD. These pots serve distinct economic purposes and are separate from validator staking pools.
| Pot | Purpose | Sources of funds | Use of funds |
|---|---|---|---|
| Claiming Pot | Holds DMD allocated for migration from the DMDv3 snapshot. | The migration allocation established at genesis. | Eligible claims transfer DMD to claimants. Amounts released through the dilution process are split equally between the Reinsert Pot and Governance Pot. |
| Delta Pot | Provides the initial reserve for epoch rewards. | The difference between DMDv3 snapshot issuance and the maximum DMD supply. | Funds epoch rewards under the protocol's allocation rules. |
| Reinsert Pot | Returns defined categories of DMD to reward funding. | Transaction fees, 50% of allocations released through claiming dilution, and 50% of transferred abandoned validator stakes. | Funds epoch rewards alongside the Delta Pot. |
| Governance Pot | Funds initiatives and development approved through the DAO. | A DAO-configurable share of epoch rewards, 50% of allocations released through claiming dilution, and 50% of transferred abandoned validator stakes. | Funds approved DAO proposals under the governance rules. |
The reward allocation process is described in Epoch Rewards and Governance Funding. Claiming dilution and abandoned-validator transfers are explained in Migration and Unclaimed Allocations and Abandoned Validator Stakes.
Epoch rewards are funded by the Delta Pot and Reinsert Pot. The contract calculates the allocation using their balances, the epoch duration, the reference validator count, and the number of validators that satisfy the reward conditions. A configurable share of the resulting allocation goes to the Governance Pot; eligible active pools receive the validator portion.
Under the reward parameters described in this Whitepaper, each pot uses a payout divisor of 6,000, the reference validator count is 25, and the standard epoch duration is 12 hours. Shorter epochs reduce the allocation proportionally; longer epochs do not increase it beyond the full-epoch amount. If fewer validators qualify for rewards, their per-pool allocations are not increased to absorb the missing shares. The detailed calculation and eligibility conditions are provided in Validator Reward.
Within an eligible pool, 20% of its allocated reward forms the upfront owner portion, including any configured node operator payment. The remaining 80% is distributed proportionally to stake, including the owner's stake and delegations. These percentages apply after the Governance Pot allocation. See Validator Reward for the pool reward breakdown.
Reward amounts change as pot balances, epoch duration, and participation change. Transaction fees and protocol-defined redistribution replenish reward funding within the fixed supply. The mechanism does not set a fixed annual return for validators or delegators.
Governance funding and use. The Governance Pot receives a DAO-configurable share of epoch rewards, together with its share of claiming dilution and abandoned validator stakes. The reward share is initialized at 10%; subsequent changes follow DAO governance. Funds support approved proposals, which may include protocol development, maintenance, ecosystem tools, or other initiatives permitted by the governance rules. Validator pool owners exercise voting rights with weight that includes delegated stake; delegators participate indirectly through their choice of pool. See DAO Governance.
DMDv4 migration allocations are based on eligible balances recorded in the DMDv3 snapshot. Each initial allocation corresponds to the recorded balance on a 1:1 basis. The amount still available to claim depends on whether the allocation has already been claimed and which dilution stages have been executed.
Claiming requires proof of control of the eligible DMDv3 address and specifies the DMDv4 address that will receive the allocation. A successful claim transfers the available DMDv4 amount and consumes that address's entitlement. The process does not transfer or burn the corresponding DMDv3 coins; balances on the legacy chain remain separate from the DMDv4 allocation.
The Claiming v4 Coins User Guide describes the user workflow. Use the claiming application to review the available allocation and follow that workflow.
Unclaimed allocations are subject to three sequential dilution stages. The published schedule uses milestones of three months, six months, and five years. The exact eligibility times are the immutable timestamps configured in the deployed claiming contract, rather than dates derived from publication of this Whitepaper.
| Stage | Scheduled milestone | Claimable share of an original, still-unclaimed allocation after execution | Funds redistributed by the operation |
|---|---|---|---|
| Before dilution | Before the first stage is executed | 100% | None. |
| First dilution | Three-month milestone | 75% | One quarter of the remaining Claiming Pot balance. |
| Second dilution | Six-month milestone, after the first stage | 50% | One third of the Claiming Pot balance remaining at that stage. |
| Final dilution | Five-year milestone, after the second stage | 0% | The remaining Claiming Pot balance. |
The second stage reduces an unclaimed entitlement from 75% to 50% of its original amount. This is why it redistributes one third of the then-remaining pot balance, rather than another quarter of that balance. Amounts already claimed are not affected by later dilution stages.
Dilution is permissionless but requires a transaction: reaching a timestamp makes the corresponding operation eligible; it does not execute the operation automatically. The contract enforces the order of stages and prevents a stage from executing twice. Claimable amounts follow the stages actually executed. After the final stage is executed, no allocation remains available to claim.
Each dilution operation splits the transferred funds equally between the Reinsert Pot and Governance Pot. The former supports future epoch rewards, while the latter funds approved DAO proposals. The claiming contract implementation defines the stage checks and allocation factors.
A validator pool is treated as abandoned when 10 years have elapsed since its last recorded availability, as determined by the contract's abandonment rules. This criterion is independent of when the validator was last selected for the active set. Remaining available without being selected does not, by itself, make a pool abandoned.
The abandonment mechanism covers both the owner's stake and delegated DMD held in the pool. When the abandoned funds are transferred:
- 50% goes to the Reinsert Pot, supporting future epoch rewards.
- 50% goes to the Governance Pot, supporting approved DAO proposals.
Once a pool has been marked as abandoned under this process, staking and withdrawals are unavailable. The Diamond UI provides an action to trigger the transfer and identifies pools already processed. The operational rules are described in Abandoned Validator Handling.
Claiming dilution and abandoned-validator handling apply to specific contract-held allocations and stakes. They do not recover DMD from arbitrary wallets whose private keys have been lost, and inactivity of an ordinary wallet does not itself trigger these mechanisms.
